251Ch4lecture6 - Cross-Price Elasticity Chapter 4 Elasticity Lecture 6 Other elasticities Cross-price elasticity = Substitutes in consumption(> 0

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9/6/2011 1 1 Chapter 4: Elasticity Lecture 6: Other elasticities Cross-Price Elasticity • Cross-price elasticity = • Substitutes in consumption (> 0) • Complements in consumption (< 0) Cross-Price Elasticity example • P tents $40 →$42 • Q sleeping bags 10 → 9 % 1 41 41 0 % 2 19 / 2 19 dd sleepingbags sleepingbags tents d tents tents sleepingbags QQ avgP P P avgQ   Income Elasticity • Income Elasticity = • Positive → normal good • Negative → inferior good Price Elasticity of Supply
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This note was uploaded on 09/21/2011 for the course ECON 251 taught by Professor Blanchard during the Spring '08 term at Purdue University-West Lafayette.

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251Ch4lecture6 - Cross-Price Elasticity Chapter 4 Elasticity Lecture 6 Other elasticities Cross-price elasticity = Substitutes in consumption(> 0

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